Steinhoff ex-boss says 'not aware' of accounts scandal

5th September 2018, 0 comments

The former chief executive of South African retail giant Steinhoff told lawmakers Wednesday he had no knowledge of accounting irregularities that caused the company to lose 95 percent of its market value.

Markus Jooste, who had not been seen in public since resigning in December as the scandal broke, appeared in front of a parliamentary committee after fighting a legal battle to try to avoid questioning.

"When I left Steinhoff... I was not aware of any accounting irregularities at the company," he told lawmakers in Cape Town.

Steinhoff's businesses include British high street discounter Poundland, France's Ligue 1 sponsor Conforama and Pep Africa, which runs the continent's largest clothing factory.

"I was not aware of anyone that acted deliberately or knowingly in violation of Steinhoff's code of conduct," Jooste added.

Amid widespread public and political anger at the company's near-bankruptcy, Jooste added that the impact of Steinhoff's massive losses on pensioners and investors "saddens" him -- but declined to apologise.

Dressed in a dark suit and blue tie, a calm Jooste told the parliamentary committee that his strategic business relationship with the German Seiffert Group from 2007 was a "big mistake".

He had felt the company's decision to draft in accountants Deloitte to probe financial issues would "take too long to complete" which led to uncertainty and hampered the firm's ability to file accounts. That ultimately led to the share price plunge.

- 'Biggest corporate scandal' -

Jooste said his clash with auditors led to his departure from the company in December 2007.

Frustrated lawmakers repeatedly pressed Jooste about his personal role in the scandal, saying they did not "buy" his story.

Chairman of the parliamentary finance committee Yunus Carrim said Jooste was effectively incriminating himself by not clarifying what part he played in "the biggest corporate scandal" to hit South Africa.

But Jooste robustly defended his actions and said that he had no information about the company after he left in December, when his 29 years at the company abruptly ended.

He had helped build Steinhoff into one of South Africa's most successful firms, attracting investors impressed by its sprawling, consumer-focused empire with outposts in 30 countries.

But at the end of last year Steinhoff revealed it was facing criminal and tax investigations, with a reported six-billion-euro ($7-billion) hole in its accounts.

Jooste reassured MPs that although he suffered a $190 million loss, he had never syphoned money out of the country.

"Losing money played no role in my decision to leave," he said.

Committee member Themba Godi said the three Steinhoff executives so far grilled by parliament had given three different accounts of the collapse.

He said that Steinhoff's former chairman Christo Wiese had described the collapse as a shock "like thunder out of the blue", while former finance chief Ben La Grange said Jooste "did not fully share information with him."

"Now Mr Jooste today says the collapse of the share price was purely as a result of uncertainty," said Godi.

South African police are investigating Jooste over alleged fraud while accountants PricewaterhouseCoopers are still unpicking Steinhoff's accounts.